VI No. 3
ASEAN cooperative spirit forward, This article looks into the economic context of the ASEAN Summit and its prospects for regional economic cooperation (See Alburo, 1987 for a similar theme). To set the to_e for review, we first examine briefly the relevant frame_rk, and then outline previous attempts _.N explain the reasoni for their shortcomings. The third section lays out in geneial terms, the Summit proposals for economic cooperation while the final section contains the concluding remarks.
EDITOR'S NOTE: In general, the past experiences oif ASEAN seem to show that it has failed in promoting the full potentials of economic integration among its merh_ercountries'. It is perceived that integration is quite difficult to achieve given the ASEAN member-countries' differing levels and paces of development, disparities in protective structures and geographic sizes. This means that whatever economic integration agreement is reached by ASEAN may not be beneficial to all its six member-countries because they are not homogeneous economies. This does not mean, however, that ASEAN does not value integration. InJhct, over the years, it has built up its efforts to formulate specific economic cooperation agreements in order to promote economic interaction in ASEAJ_. This issue's main article gives us a glimpse of these ell'errs past and present - whose end goals are to help realize the benefits of integration in terms of what theoretical concepts argue for. Our guest writer is Dr. Florian A. Alburo, Professor of Economics at the University of the Philippines' School of Economics (UPSE) and Deputy Director-General of the National Economic and Development Authority (NEDA). In his article, Dr. Alburo discusses the relevant framework used in and the previous attempts at, the consideration of regional economic cooperation within ASEAN. More importantly, he presents, in general terms, the recent ASEAN Summit proposals for economic cooperation. Also m this issue is the fifth listing of completed, ongoing and pipeline research prelects on economw development under the DRN's Clearinghouse Supplement.
The framework for regional economic integration is the notion in t_ade theory that a partial move towards free trade iraproves welfare among member nations, The removal or reduction of tariffs among these countries should improve resource allocation and expand markets: Thus, whether integration is only beginning (free trade area), or will move along higher forms (customs union, common
other venue, and that no untoward init was not postponed nor moved to ancldent happened despite the noise of pos-
meeting where new initiatives, especially for economic cooperation were considered and approved. After all, the Summit was simply the mechanism for launching more innovative schemes to move
ASEAN" Prospects for Regional Econ " oo-p er a"o u n
ernments (ASEAN Summit) was held in _hemeetingofASEANHeadsofGovManila in December 1987. The fact that.
"_aistinct signal poetical stability, gainsibilities was viewed theof in Philippines as mg for the Government some degree of political mileage. However, we should not be distracted from the substance of the
market ot economic union), freer trade will be beneficial, In the theory of the second-best, however, we are warned that not every move towards free trade is welfare-improving in the sense that trade diversion nlay outweigh trade creation (Viner, 1950; Lipsey, 1960). Indeed, if integration leads to trade deflection away from efficient sources under a non-discriminatory situa-.
tion to an inefficient partner source, resource misallocation takes place. When the ASEAN (Brunei, indonesia, Malaysia, Philippines, Singapore, Thailand) is seen in this regard, what is ira. mediately apparent is that the countries are not homogenous economies. Singapore and Brunei have virtually no agriculture sector to speak of, much less (Please turn to page 2)
natural resources. Indonesia is a fairly' large country with a domestic market which enables it to reap economies of scale_ On the other hand, Singapore and Brunei have low tariff walls in comparison with the other for countries (Estanislao_ 1983; Saw Swee-Hock, 1980; Ariff and Hill, 1985). ASEAN member countries' differ- ing levels and pace of development, disparities in protective structures_ and geographic sizes indicate that integration benefits may not accrue uniformly across countries. Moreover, not 'all these six countries have similar production structures for capturing similar efficiencies. What this means is.that under an integration set-up, once the ASEAN countries reduce their protective
each other (and retain, their individual protection against the rest of the world), the benefits would not be the same geographically or temporally. In particular, countries which have high protection in the first place may benefit more (or earlier) than those with less (as in Iudonesia vs. Singapore). On the other hand, liberalization may have a trade_ff m terms of later efficiency due to market â€˘ size In other words integration left to itself may not yield a practical and accept acceptable result, This does not mean though that the ASEAN attaches no value to integration, Indeed schemes were put in motion more than a decade ago precisely to begin a reduction in barriers to intra ASEAN trade, The countries drew up schedules of products whose existing tariff structures would be gradually reduced. Apart .from .. these specific economic cooperation, agreements were entered into to promote economic interaction in ASEAN_
ASEAN Experience Economic integration and Cooperation
direction via an alteration of the tariff structures of privately-traded goods, ASEAN has not been lacking in symbols of economic cooperation. Tire ASEAN governments have a food security reserve â€˘system providing for emergency rice reserve, joint programs forthe eradication of foot-and-mouth-disease and a training institute in the area of agriculture. There is an ASEAN Swap Atrangement that provides for US $200 million stand-by credit for members with Balance of Payments problems. ASEAN 'also expresses a common stance on international economic issues with regards GATT, the EEC and other international commodity agreements, "ASEAN
In industrial cooperation ASEAN gow ernments are not also .short of mechanisms for resource-pooling or market-sharing. Several upstream projects were agreed upon, and in some cases; begun in the different countries like a fertilizer project for Indonesia, rock salt-soda ash project for Thailand, and superphosphate project for the Philippines_ Apart from the visible hand of government in the implementation of these projects several problems came in the way that left this part of industrial cooperation with little accomplishment. In the program on ASEAN Industrial Cornplementation (AIC), past efforts also left much to be desired. The original package
members. For another
in the automotive
ments along specific economic problems_ Two, through the influence of trade
alization or in influencing trade direction that we see the potential of economic
nature of the
items offered for tariff preferences, pr_ ducts listed under PTA were those of n_ consequence to ASEAN trade. There was no correspondence between the increasing number of items listed'under PTA and the value of trade taking place. Second, the acceptance of across-the-board items for preferences, or the switch to increased ceiling values was effectively nullified by allowing member countries to put up an exclusion list for 'sensitive" product iraports. In fact, the number of items exeluded ranged from 2 percent of all items for Singapore to 63 percent of all items for Thailand. Finally, associated with the institution of the PTA is a rules-of-origin requirement which also effectively' limit_the scope for .intra-ASEAN trade wtl margins of preferences (Ooi Guat Tin, 1981, Chng Meng Kng 1985). In general past ASEAN experience seemed to have failed to fully capture what theory argues to be integration potentials For one, the institution of the PTA, while meaningful was not systemic in nature not drawn up jointly among all
The experience of ASEAN in economic integration and cooperation has been visible in at least two fronts. One in the form of direct governmental arrange-
because of the voluntary
differing levels and pace of development, disparities in protective structures and geographic sizes .indicate 1hat integration benefits may not accrue uniformly across coun-
industry met difficulties hi product identification and country allocation since governments participated irr manufacturhag location decisions (Clang Meng Kng, 1985). It is perhaps in the _rea of trade liber-
integration. In this aspect, ASEAN also went through the motions of reducing each other's tariff rates through preferences. From original margins of 20-25 percent, tariff cuts were further raised to 50 percent. Within the Preferential Trading Arrangements 0PTA), trade preferences began with voluntary offers whereby each country extended regular preferences. This was later expanded to an across-the-board approach whereby automatic preferences were given for certain levels of import values (from US $50,000 to US $10 million). Despite what appears to be an important vehicle for pushing private trade into regional interaction the PTA suffeted from a host of problems. First,
there was no clear envisioned
ASEAN economic front. Finally, even the explicit economic cooperation efforts were dominated by government intervention and not actively promotive of private sector contribution. This does not mean that there-were no (Please turn to page 10)
DEVELOPMENT RESEARCH NEWS
(Fifth of a Series)
The DRN Clearinghouse Project aims to gather, condense and disseminate the highlights of completed; ongoing and pipeline research projects on areas related to economic development and policymaking in the Philippines. Like the previous listings, this fifth batch of studies covers research studies conducted by various
Labor and Employment. Population, Industry, Regional, Rural and Urban Development, and Development Planning Methods and Approaches. The first batch of studies covered 86 projects and appeared in the SeptemberOctober 1985 issue of the DRN which featured 'Policies and Research Issues
appeared in the November-December 1986 issue featuring "Savings Mobilization in :the Philippines: Focus on the Rural Sector' and covered 66 research projects. Finally, the fourth batch of studies consisting of 42 resea.rch works was featured in the January-February 1988 issue_
private and government institutions ened in research, development planning policymaking. In particular, this batch includes studies on Agriculture and Food, Human Resources Development,
on Energy in the Philippines: The 1980". The second listing was included in the May-June 1986 issue which focused on "The ESIA-WID Macro Component Project" and had 53 studies. The third listing
In this particular issue 30 studies are included, 11 of which are on Agriculture and Food. This batch of studies will be helpful to researchers working on the agriculture sector.
AMDP - Agricultural Mechanization Development Program UN-APDC - U.N. Asian Pacific Development Center ASEAN-ADPC - ASEAN A__cultural Development Planning Center BAEcon - Bureau of Agricultural Economics BAS - Bureau of Agricultural Statistics CPDS - Center for Policy and Development Studies UP-CPA - U.P. College of Public Administration DOA-Region IV - Department of Agriculture-Region 1V UN-ESCAP - U.N. Economic' antiSocial Commission ]or Asia and the Pacific FAO - Food and Agriculture Organization 1DRC - International •Development Research Centre IRRI - International Rice •Research Institute
NCSO NEDA PCARRD
- National Census and Statistics Office - National Economic and Development Authority - Philippine Council for Agricultural Resources and Research Development NEDA=PDPRP - NEDA Population Development Planning and Research Project RRDP - Rainfed Resources Development Project UP-SARDF1 - U£. Social Action Research and Development Foundation, Inc. NEDA-_,RSP - NEDA Special Research and Study Project r,rP-SURP - U.P. School of Urban and Regional Planning NEDA-TDI - NEDA Training and Development Issues UNDP - United Nations Development Programme USAID - United States Agency for International Developmen t
COMPILAI'I()N AREA OF STUDY
Agriculture and Food Agricultule and Food Policies
TITLE OF RESEARCH PROJECT(S)/STUDY
PROJECT COORDINATOR(PC) OR PRINCIPAL INVESTIGATOR (PI)
SPONSORING AGENCY OR INSTITUTIONAL AFFILIATION OF RESEARCHER(S) a
Philippine Agricultural Policy and Food Supply
Metro Manila, Philippines
Fermin D. Adriano and Agnes C. Rola (PIs)
Production and Marketing Sy stems in Rainfed Agriculture. Fisheries and Forestry in Bicol: A Regional Profile.
Aida R. Librero (]?Is)
RRDP and PCARRD
Production and Marketing Sy stems in Rainted Agriculture, Fisheries and Folestry in Cagayan Valley: A Regional Profile
Cagayan Valley_ Philippines
Aida R. Librero (PIs)
RRDP and PCARRD
Production and Marketing Systems in Rainted Agriculture. Fisheries and Forestry in Eastern Visayas: A Regional Profile
Eastern Visayasj Philippines
Aida R. Librero (Pls)
RRDP and PCARRD
Production Systems in Agriculture, Forestry in
and Marketing Rainfed Fisheries and Western Visayas:
Western Visayas, Philippines
Aida R. Librero (PIs)
RRDP and PCARRD
Assessing the Benefits and Risks of Pesticide in Philippine
Iloilo, Benguet, Calamba
Agnes C. Rola (PI)
USAID and Winrock International
Ford Foundation CPDS
Nutrition and Welfare Implication of Strategies to Increase Production and Profitability of Small Farms
Selected plovinces in the Philippines
Bridging the Information " Gap in Integrated Pest Management (IPM) with the Participation of Rural Women and Children
aln cases where there appears two (2) or more insff.tution cited is normally the funding or sponsoring agency.
IIIIII II I II II II IIIIII
DIES ON PHILIPPINE
Completed (August 1.987)
The study aims to give projections of food demand and supply to meet the needs of an emerging urban population with varying tastes and belong to different strata Results of the study show that in the past food supply is adequate for Manila population. Thus it is recommended in the study that to be more effective in the future policies should be geared towards easing the bottlenecks of food distribution and more favorable pricing policies This study is part of an inter-agency project on "New Urban Population: Food Demand and Supply which is funded by FAO and participated in by the Food and Nutrition Research Institute: the U.P. Population Institute and the Center for Policy and Development Studies (CPDS) at UPLB.
The paper presents various aspects of the production and marketing systems in agriculture fisheries and forestry in Bicol using secondary data from reports of studies conducted by various research institutions universities and colleges and private institutions The study also looks into the impact of various government programs and policies. This regional profile is one of the 3 components of the research program entitled "Benchmark Assessment of Rainfed Areas' with the other two components focusing on site assessment of biotechnical research sites for farming systems and fisheries of the Rainfed Resources Development Project (RRDP).
Using secondary data from reports of studies conducted by various research public and private institutions, the study reviews and analyzes the production and marketing systems in agriculture fisheries and forestry in Cagayan ValleY. The study is one of the three components of the research program entitled "Benchmark Assessment of Rainfed Areas" with the other 2 components focusing on site assessment of biotechnical research sites for farming systems and fisheries of the Rainfed Resources Development Project (RRDP).
This regional profile reviews and analyzes the production and marketing systems in agriculture, fisheries and forestry in Eastern Visayas using secondary data from reports of studies conducted by various research institutions universities and colleges, and private institutions. This paper is one of the three components of the research program entitled "Benchmark Assessment of Rainfed Areas" with tile other two components focusing on site assessment ofbiotechnical research sites for farming systems and fisheries of the Rainfed Resources Development Project (RRDP).
Completed (January 1987)
Using data from reports of various ies and forestry in Western Visayas.
this paper analyzes
Results show that agriculture fisheries and forestry sectors percent to the region's gross domestic, product. In spite of to the various problems which beset .each sector. However_ development is exigent Recommendations on possible ways cluding research needs are suggested
The study aims to provide fectively integrate nutrition
states the date of completion
systems in agricukure
absorb two-thirds of the total labor force these contributions, the growth of these the potential benefits from these sectors of improving production and marketing
vital information for the planning/replanning and wlefare considerations.
and contribute about 37 sectors has been slow due are enormous thus %heJx systems in theregions in-
of benefits and to the hazards arrays the ecoincreased yield to humans as a
in order to ef-
Increased use of toxic chemical pesticides in crop production has caused serious health and evironmental problems Thus project is undertaken in order to introduce integrated pest management IPM) which integrates cultural, biological and chemical pest control method to three experimental communities.
The study aims to provide some basic data and answers to skepticisms and criticisms about the effects, in terms risks of pesticide use in agriculture It also aims to sensitize policymkers consumers especially the farmers pesticides may bring if unregulated in use. The framework used in the study is the benefit risk analysis which nomic benefits alongside quantitative estimates of the risks involved. The benefits are measured in terms of the as a result of pesticide use in rice and vegetables Risks are measured in terms of probability of toxic impacts result of ex_tmsure to pesticides and their residues.
or the expected
date of completion
Hence, (if on-going);
or date of launching
1111 IIIIIII1 I
AREA OF STUDY
TITLE OF RESEARCH PROJECT(S)]STUDY
PROJECT COORDINATOR(PC) OR PRINCIPAL INVESTIGATOR (PI)
SPONSORING AGENCY OR INSTITUTIONAL AFFILIATION OF RESEARCHER(S) a
Participatory Verification and Technology Generation of Location Specific Integrated Pest Management (IPM) Technology
CB. Adalia and A.C. Rola (PIs)
Action-Research on Delivering Agricultural Mechanization Technology through Institution-Building
Felisa PL_ Cruz (PI)
DOA-Region and AMDP
Preparation of an Annotated Bibliography on Women in Rice Farming Systems in the Philippines
Agnes C Rola (PI)
Towards Ameliorating the Conditions of Sugar Workers: A Study of the Sugar Industly in an Economic Crisis
Laguna, Batangas, Pampanga, Tarlac La Caflota, Negros Occidental, and Bukidnon
Wage and Income
Effect of Wage Rate Policies on Labor Absorption in the Aglicultu_al Resource Sector
L.V. Gabito J.P. Almeda
An Evaluative Study of DSWD's SelfEmployment Assistance (SEA) Program
Philippines: Regions 1, 7 and 11
A Pohcy and Empirical Framewolk for the Promotion and Productivity Improvement of Non-Farm Employment
An Analysis of Factors Relating to the Success on Failure of the Philippine Food and Nutrition Program
Gabriel U. Iglesias (PI), et al.
Assessing Primary Health Cale (PHC) as a Strategy in Health Service Delivery
Philippines: and 12
The Health and Nutritional Status of the Hanunuo
Bul,-dacao, Oriental Mindoro
Agricultural Projects/ Agricultural Employment and Productivity
Labor and Employment Laboi
Mangyan: Implications for a Community-based Health Delivery System
Completed (May 1987)
The study .is an action research program conducted for two rice production seasons Twenty-one farmer-cooperators were introduced to the Integrated Pest Management (IPM) technology. This technology is a method of pest control which cornblues the.available pest control methods Results of the study show that though some farmers are not yet vonvluced of the IPM, it takes more than two production seasons to really convince most of them that IPM can increase their projects more than when they use chemical (or pesticides) control A follow-up study will be done in this area with both rice and vegetable farmers as cooperators.
On'going (June 1988)
The study tests the possibility of delivering extension services through institution-building with varying farming systems, in Oriental MLudoro through the establishment of multi-purpose
On going (May 1988)
The study aims to prepare an annotated The study also determines gaps in research
bibliography on the role of women on the role of women.
approach to six pilot barangays cooperatives.
in the rice farming
system in the Philippines.
The study focuses on ways of ameliorating the conditions of sugar, workers in an economic crisis. The study includes a brief historical account of the sugar industry from the Spanish period to the present, technical aspects of sugar can production; and the growth process, cultural and management practices. Moreover, it also examines the theoretical literature on plantation agriculture and reviews major works on the Philippine sugar industry. A second volume is included in the report which containes survey data showing comparison across different survey areas and different groups of respondents.
The study shows that received by agricultural plantation workers.
the rate of increase workers, the study
in legislated wage is higher than the prevailing wage. Given the lower rate suggests that the legislated wage is not adequately implemented among non-
Completed (April 1988)
The study looks into the profile of the actual beneficiaries of the SEA program. It compares target beneficiaries before and after the availment of the program. The administrative capability effectiveness in the implementation of the program is also examined.
Completed _areh 1988)
The paper significance
examines the status and performance of small-scale in overall non-farm activities in the country.
in the Philippines
the living conditions of the of the agency as well as cost
(Completed (February 3, 1988)
The study examines the factors that contribute to the success or failure of the nutrition program in improving the nutritional status of the Filipinos. It looks into the relevance and adequacy of current food and nutrition policies, the administrative and management component of the program at the macro and micro level, and the efficiency of service delivery at the barangay level.
On-going (July 1988)
The study looks into the dynamics involved in the implementation of the Primary Health Care Program (PHCP), the value of activities undertaken through PHC, and the characteristics of participation strategies undertaken to implement PHC. The study hopes to identify particular institutions to coordinate with the Department of Health. in implementing PHC, at the same time, assist polieymakers in deciding the merits of continuing the program.
The study co mmunity
looks into the morbidity and mortlaity participation in health projects.
I IIIIIIII IIIII IIIIIIIlll
AREA OF STUDY
TITLE OF RESEARCH PROJECT(S)/STUDY
PROJECT COORDINATOR(PC) OR PRINCIPAL INVESTIGATOR (PI)
SPONSORING AGENCY OR INSTITUTIONAL AFFILIATION OF RESEARCHER(S) a
Women and Youth
Women's Work and Family Strategies in the Philippines
Fertility and Education in the Ph.ilippines
Rosalie L Daplas (PI)
Organizational Issues in Community Participation in the Context of the Philippine National Family Planning Program
Batangas, Pampa'nga and Legaspi City
Stella P, Go (PC)
Migration and Development
Rosemary Aquino and Leticia Postrado (PCs)
Redntegration of Returning Overseas Conlzact Workers The Case of a Metro
Bgy. Vergaxa, Mandaluyong, Manila
Stella P. Go (PC)
Frances I, I11o (PI)
Rural and Urban Development
Rttral and Urban Planning
A Component Strategy for Agricultural Estate Plaminag in NPC Watersheds and
Angat River - tile 68-hectare pilot project study
The Application of Threshold Analysis in the Evaluation of Urban Expansion Areas: The Case of San Pablo City
San Pablo City
Sirous Saljoughian Esfahani (PI)
The Quality of Rental Housing in the Areas for Priority Development (APDs) in Sampaloc and its Implications for Rent Control
Landholdings, Institutional Considerations and the Planning Process
M. Luna (PI)
and Approaches Annual Macro-econometric Model :for the Philippines
Roberto S. Mariano and WiniÂŁrida Constantino (PI)
UNDP, USAID and UNESCAP
Completed (March 1988)
This project examines the ways by which families utilize female labor, particularly in times of economic reconstructs the rearrangements in production and consumption which women and their respective families and captures the continuing realignment of resources in response 'to external market forces.
The study presents the relationship between fertility and education in the national and regional levels. Likewise, it also indudes in the analysis the fertility differential by area classification. The study takes into account the mean age at child bearing, mean number of children ever born, together with current fertility measures (i.e. total education-fertility rates, based on births during the last twelve months data).
The study determines the extent or degree to which community participation as a program strategy is applied and encouraged. The study also aims to formulate a set of country-specific recommendations which outlines the necessary steps to make eommmfity participation an important inpul into the national family planning program.
The study is composed of two case studies; one is a "green revolution" project which makes people want to stay in the rural areas, and another on a "resettlement" project, a scheme which results in people moving from urban or semi-urban to rural
disequilibria. It had undergone,
The study lbcuses on the psycho-social and economic dimension of return migration in one community in :Metro Manila, and the absorption of returning contract workers. The findings indicate that the worker's remittance is not sufficient for productive investment since it is enough only in meeting the basic needs of the worker and his family. The study also stipulates that overseas employment does not create problems of readjustment into the family by the overseas contract worker.
Completed (April 1987)
The study introduces the regional and subregional development capability of NPC in providing cheap electricity to the country at minimum cost. With the current situation, both the role of NPC in economic development and the role of watersheds in supporting the power generating units are underscored. This research is the first attempt to consider both the need to protect watersheds and to generate additional income for environment protection. Due consideration is also given to alleviate the economic life of the beneficiaries (Dumagat) in the selected pilot area within the Angat River Basin. The study recommends a Regional Area Development Office and the transfer of full jurisdictional control of all the river basins to NPC, which currently serves the hydroelectric plants.
Completed (March 1987)
The study applies the threshold analysis tecinrique in the evaluation of urban expansion areas. It illustrates how this quantitative technique can rationalize evaluation of urban expansion areas and decision-making to supplement the subjective and intuitive procedure usually practiced by planners. The study also tries to determine whether this technique should undergo any modification if applied in the Philippine context.
Completed (March 1986)
The study determines the quality of housing in rental apartments and its implications on rent control. Seven social indicators are used in measuring the quality of rental housing; namely, 1) dwelling structures and its facilities; 2) indoor space; 3) tenure; 4) rent; 5) accessibility to various functions and services; 6) physical enviromnent; and 7) social environment or "neighborliness." A scheme is developed to measure these seven indicators.
Completed (Jttly 1987)
This study provides medium-term forecasts for macro-econometric various economic and financial policies of government.
It also gives a quantitative
TITLEOF RESEARCH PROJECT(S)/STUDY
PROJECTCOORDINATOR(PC)OR PRINCIPAL INVESTIGATOR(PI)
SPONSORINGAGENCY OR INSTITUTIONAL AFFILIATIONOF RESEARCHER(S) a
Examiningand Maximizing CurrentDecentralizatiou Efforts of the National Government
MonitoringSelected GovernmentPrograms and ProjectsThrough People's Participation: Focus on Non-Governmental Organizations(NGOs)
Gabriel U. Iglesias(PI)
Reestinlation of Shadow Pricesfor the Philippines: The Shadow ExchangeRate, The Shadow WageRate and the SocialRate of Discount
of the ASEAN countries and differing levels of development. A customs union
for an "ASEAN Trade Area" by the year 2000. By that time, 90 percent of total
would be formed among the four countries of Indonesia, Malaysia Philippines and Thailand and a free trade area linking the union with Singapore and Brunei. By reducing tariff among the four countries toward some average figure (e.g. Malaysia), mtra-ASEAN trade would be promoted. Since the common tariffs would mean a general reduction for the high tariff countries (Indonesia, Philippines and Thailand), trade diversion can
ASEAN trade would beunder preferences: and there would be a reduction in theexclusion list to, 20 percent of import volume, and differential elements for Singapore and Indonesia. Other dimensions of economic cooperation were given new imtiati,, es as well such as the use of ASEAN currencies, joint ventures in production and processing of agricultural commodities etc. By and large, however, ASEAN spent its
be reduced. On the other handy free trade arrangements with Singapore and Brunei would likewise reduce trade diversion
efforts in coming up with. schemes for encouraging greater trade and integ_ tion.
The economic proposals that were approved at the ASEAN Summit were formulated by the countries' economic officials. They, in turn, were drawn from an array of scb.emes suggested by the private sector, ASEAN business gfoups_ or cornmissioned by the different ASEAN economic committees (Naya, 1987; Institute of Southeast Asian Stuaies. 1987:grouo of Fourteen, 1987; Jan-Won Suh, 1987). The proposals ranged from the forma_ tion of a customs union to across-theboard increases in the minimum margin
in as much as both countries would maintain their respective tariff levels, The ASEAN Chambers of Commerce and Industry supported a proposal which urges an "ASEAN Market Liberalization Initiative", suggesting a 50 percent mini- ' mum MOP on across-the-board basis for non-agricultural products_ This means the elimination of eclusion lists and the allowance of waivers only in emergency eases and where injury is certain in some specific sectors of a country. For agriculture, it has been agreed that there
In the final analysis, the Summit's economic proposals were drawn from these various alternatives with clear recognition of the realities of the individual country policy, culture and level of development In addition, the proposals took into account what is feasible and what can be achieved, with minimum disturbance to the ASEAN institutional structure ASEAN's thrust does not seem to be in the abstract notion of integration or trade preferences 1.e_, where general
of preference (MOP)for non-agricu-ltural products traded. In the Institute for Southeast Asian Studies Colloquim, a hybrid system is proposed that recognizes inhelent varying tariff structures
would be a continuing product-by-product approachtoliberalization_ A study commissioned by the ASEAN Committee on Trade ,.andTourism (Naya, 1987) recommends quantifiable targets
trade barriers are removed and market f_rces are allowed to determine net trade effects. Rather, the Summit proposal is anchored on the preferential trading arrangement (PTA), i.e., strength-
real achievements to speak of. If anything, work among ASEAN economic committees and exchange among bureaucrats served to break down barriers to mutual interest. Indeed, this experience paved the way for aiming at bold initiatires and a more dynamic vision for ASEAN.
(Next page please)
-.. ,..., ....
On-going (January 1989)
The study assessesthe extent to which key national agencieshave decentralized substantive powers_authority andresources to respective regional and field offices. The leveland substance of reorganization efforts across agenciesis analyzed aswell as the impact of administrative decentralization. Moreover, it also compares the experience of the Philippinesand other countries on regionalautonomy.
The study monitors the following projects: National Tuberculosis Control Program, DAR's Resettlement Program,NHA Shelter Program,among others. The effectivenessof NGOsinvolvement in these programs is assessedby the study.
This study examines recent methodologies proposed in the estimation of shadow prices. Also, it threshes out conceptual difficulties in the understanding and use of shadow pricesin project evaluation.
(From page 1 O) ening this system from where integration will be realized. Specifically, the proposal entails the following: First, there is an objective of increasing the share (in volume and value) of trade covered by PTA at the "turn of the century." This objective, while not cast in quantitative terms, reflects a schedule and a timetable, and when viewed in the context of other features is equally conPlative as a pronouncement for the 2000 Second the Summit envisions a reduction in the exclusion listto 10 percent_of traded items (using a standard ASEAN trade classification scheme and aggregation), and 50 percent of intraASEAN trade value. At the same time, the countries will harmonize their exclusion lists, Third, margins of preferences (MOPs) are to be deepened from its present minimum 25 percent to 50 percent for those enjoying some tariff reduction under the existing PTA. Fourth, allowance will be made for a differential treatment for some countries in the enhancement of PTA. ASEAN has accepied the longer time frame for both Indonesia and the Philippines to achieve the targets, i.
Finally, the ASEAN has committed a standstill in the imposition of further trade barriers and a roll-back in terms of non-tariffbarriers Apart from this major scheme through the PTA, the Summit also approved other supplementary schemes such as the strengthening of the ASEAN Industrial Joint Ventures (AIJV) through specific proposals (e.g., automatic list, MOP on ASEAN sourced inputs, 90 percent MOP for AIJV products among particioating countries, etc.), and improvement of economic machineries and other programs, _ Collclusion Given the Summit's economic initiatires, will integration be realized in the sense of its theory and tradition? Can the benefits of integration be achieved? Will the initiatives around PIA be superior to, say, customs union? A seriously pursued and strengthening PTA along the hne of the Summit's economic proposal will definitely expand the scope of intra-ASEAN trade. A harmonized and limited exclusion list to the PTA guarantees that exemptions would not be fragmented even though their identification and determination are subject to negotiations An agreed-upon depth in MOP will certainly induce efficiencies in import substitution.
The fact that such PTA improvement is proposed to have a 5-year schedule will rationalize the incremental phasing-in process. The review process will allow adjustments in the details of the PTA. In addition, because the implementation of PTA is spread over time, it can allow for differential speeds for certain countries such as Indonesia and the Philippines. in short increasing MOPs exercised throuh PTAs are close substitutes to a purely free trade area They become even closer if the share of intra-ASEAN trade through it is greater. This is different from a collective declaration of all six (6) countries as a free trade area or eventually a union. Indeed, progressive declines in trade barriers among ASEAN countries (through PTA) will similarly achieve integration potentials. Because of the more systematic nature of the measures, signals to the private sector will obviously be clearer and provide it with the amount of certainly required for stable planning. Similarly, a specified schedule and timetable also give the various governments parameters for the design of domestic pohcies and programs in support of the Summit's proposals. To summarize, the strengthening of te PTA will endow economic benefits to ASEAN in the same manner as indi(Please turn to page 12) 11
,ASEAN Prospects .... (From
cated in .some of the theoretical arrangements under economic integration. This would not of course be superior to a customs urdor or its primary form, a free trade area. Yet. the Summit's economic scheme appears most feasible and acceptable while satisfying the character of tradition and theory. Perhaps what this proposal preserves is much of the ASEAN bureaucracy that has grown over the years, in fact the proposal can give both meanialg and direction to it. In particular, the various arena for negotiations will become more focused For example, instead of coming up with separate exclusion lists; substantive work wil]. instead be focused on harmonizing such lists across countries..A review process proceeds atfile end of the first 5 years of iraplementation, which again provides a juncture within which the bureaucracy and ASEAN machinery are put to work. The Summit economic schemes, minus file "free trade", "union" or related jargon, aim at the same integration vision, Only this time, there remains a certain amount of intervention within the frame of reference of much of the existing re,qonal capacities, if not machineries. â€˘
Ma i-June 1988
Alburo_ Florian "ASEAN Free trade Area or Imported PTA: What's in A Name?" UPSE Discussion Paper 8704 (December 1987). Ariff, M. and Hal Hi]].,Export-Oriented Industrialization: The ASEAN ExpeHence (London: Alien and Unwin, 1.985) Ctmg Meng Kng, "ASEAN Economic Cooperation: The Current Status" in Lira Joo-Jock (editor), Southeast Asian AffMrs 1985 (Singapore: Institute of Southeast Asian Studies, 1985).
Estanislao, Jesus, ASEAN: A Profile of Development (Manila: Center For Research and Communication,
Group of Fourteen on ASEANEconomic Cooperation and lntegration,ASEAN: The Way Forward (Kuala Lumpur Malaysia: Institute of Strategic and international Studies, 1987). institute of Southeast Asian Studies ASEAN The Tasks Ahead (Singapore: ISEAS 1987).
Lipsey, R.G., "The Theory of Customs Union: A General Survey," Economic Journal (September 1960). Naya, Seiji_ "Towards the Establishment of an ASEAN Trade Area," A Report prepared for the ASEAN Secretariat and the Committee on Trade and Tourism .(Honolulu: ter, March, 1987)_
Ooi Guat Tin, The ASEAN Preferential Trading Arrangements (PTA)_ An Analysis of Potential Effects on lntraASEAN Trade (Singapore: Institute of Southeast Asian Studies, 1981). .._ Saw Swee-Hock The ASEANEconomt_,, in Transition (Singapore: Singapore University Press, 1980). Suh, Jang-Won, "New Forms of Industrial Cooperation" A Report prepared for the ASEAN Committee on Industry Numerals and Energy (Kuala Lumpur Malaysia, APDC 1987) * Viner, J., The Customs Union lssues (New York: Carnegie Endowment, 1950).
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